COVER STORY, MAY 2005

SQUARE IN THE SIGHTS
With Town Square Las Vegas, Turnberry Associates and CENTRA Properties aim to serve both tourists and locals.
Brian A. Lee

Both tourists and residents will find Town Square Las Vegas easy to access.

That’s exactly what Turnberry Associates and CENTRA Properties are doing with Town Square Las Vegas, a 1.8 million-square-foot retail-based project slated to begin construction this month on Las Vegas Boulevard at the intersection of Interstates 15 and 215. Scheduled to open in fall 2006, the development will feature 1.2 million square feet of retail, 250,000 square feet of office space, a 275-room hotel, a cinema and a fitness center, all packaged in a charming, open-air town square environment that will keep both Las Vegas visitors and residents coming back for more.

Just the Spot

Like an eager welcoming committee, Town Square Las Vegas is positioned to be one of the first things seen by a large percentage of visitors coming into the city. “We just happen to be at the intersection of two freeways — the 215 beltway, which will encircle the majority of the Las Vegas Valley when it’s done, and the I-15 freeway, which is the north-south freeway and the feeder from Southern California,” says Frank Volk, executive vice president of RKF & Associates, the leasing advisory firm for the project.

According to the Las Vegas Convention & Visitors Bureau, 23 percent of the tourist market on a gross basis is inbound from Southern California along the I-15 freeway. At the southeast corner of the property, McCarran International Airport will build a consolidated car rental facility on 75 acres at the intersection of I-215 and Las Vegas Boulevard. Statistics show that during the last 3 years about 18 percent of the tourist population rented a car.  

“Before we’ve done anything, we’re getting the first and last look at around 40 percent of the tourist market,” says Volk. “It’s really going to be the first project of any scale that they’re going to see when they enter Las Vegas. We feel that it will be the gateway for the tourist population to Las Vegas.”

As for the residential market, 850,000 local Las Vegans are within a 15-minute drive of the mixed-use development because of freeway access, says Volk. Also, 62 percent of new Las Vegas homes are sold within that same radius — Town Square’s trade area. That comes out to around 16,000 to 17,000 new households being added to the trade area on an annualized basis.

Town Square Las Vegas will be located equidistant from two of the city’s affluent areas — Summerlin to the west of the city and Green Valley in Henderson, Nevada, to the south. “They kind of form a barbell and we’re at the center of it,” says Volk. “You live in Summerlin and your friends live in Green Valley, and you want to go have a nice meal, but there’s no common ground [between you] other than the Strip. We’ve obviously identified that and established that common ground [with Town Square Las Vegas].”

Turnberry Associates and CENTRA Properties determined that there is a vacuum in Las Vegas in terms of upper-end dining and shopping for locals. Until this project came about, if locals wanted to shop or dine at a higher level, they had to go to the Strip. Yet, residents generally don’t care to negotiate the tourist traffic on the Strip or compete for dinner reservations with out-of-towners there.

“Fortunately, this is a location right at the doorstep of the Strip so we as locals can move in and out without feeling like we’re walking into the tourist market, and the tourists can easily access the property,” says Jim Stuart, principal at Las Vegas-based CENTRA Properties. “We’ve found a great cross-pollinization between two market segments that could only exist in a few spots. This happens to be the most important spot.”

An Opportunity Arises

Agility and complementary skill sets were important factors in the formation of Turnberry Associates and CENTRA Properties’ partnership as joint developers of the Town Square Las Vegas project, but common vision and values constitute the fuel that will push this development far above other retail properties.

Both companies are privately held so they don’t have too many layers to go through to move quickly on deals. CENTRA Properties’ core competency has been very traditional real estate such as business parks, industrial parks and some neighborhood retail, but not mixed-use developments. Based in Aventura, Florida, Turnberry has a lot of experience developing enclosed malls and shopping centers, but also knew about high-rise luxury condominium projects as evidenced by its Turnberry Place development in Las Vegas.

“Our attraction, and perhaps even fascination, with Turnberry really came from touring not only the Aventura Mall [in Florida] but locally the Sterling Club, which they built in conjunction with Turnberry Place,” says Stuart. “Their attention to detail, the quality of the fit and finish for their product were far in excess from anything we’d seen. Because we were very focused on this being a legacy project to us who raise our families here, we wanted to make sure we had a partner that would take a very long view and would put the kind of investment dollars on the front end knowing that it would yield great returns 10, 15, 20 years down the road, not 10 to 15 months down the road.”

“Jim’s thoughts were that this would be something that would appeal to the community and something that could be unique and not just another shopping center,” says Drew Barkett, director of real estate & development at Turnberry Associates. “That’s kind of where it got kicked off.”

As the locally based partner, CENTRA contributed not only its knowledge regarding infrastructure and how to deal with municipality, entitlement and construction issues, but also an understanding of the market risk. Turnberry brought its overall retail design and leasing strengths to the table.

“We’re very fortunate that Jim and [his partner] Ken Sullivan of CENTRA had the vision to see this piece of dirt not just as a warehousing opportunity,” says Barkett. “But they knew [mixed-use] wasn’t their bailiwick so they chose to explore opportunities with other developers,” Barkett lists his company’s work in the Las Vegas market, its reputation for selectivity on locations and, of course, its ability to react quickly as important reasons why the partnership became a reality. 

“I think we had 30 to 60 days to get a deal figured out to close the property, which was extraordinary by everyone’s imagination,” says Stuart. “There are very few people that can do something like that.”

The parcel itself has had a complicated history. Part of it belonged to the heirs of Howard Hughes. Several pieces of the property were tied up in litigation, including an old hotel-casino that went through bankruptcy and an abandoned off-ramp that was owned by the Clark County Department of Aviation.

“We had to solve those lawsuits,” says Stuart. “It took about a year to put the whole property together, to take out some of the existing tenancies and such. It wasn’t as simple as buying 100 acres. If it was that simple, this site would’ve been gone decades ago. If there’s any magic created on the land, it was that all those things happened, we were able to assemble the land and solve a lot of problems, and the net result is that we have one of the more fabulous retail locations in the country.”

Numbers Game

To make this $500 to $600 million development a success, Turnberry and CENTRA knew they had to deliver a special product that would take full advantage of the outstanding location. From sparing no expense on the highest quality project partners to constantly assessing and reassessing the lifestyle and restaurant tenant lineups, every detail matters.

“Together with Turnberry’s assistance we’re able to filter through the numerous tenant profiles and decide what is an appropriate fit for this market,” says Stuart. “I think that’s a big departure from a publicly traded owner that is programming space with all the tenants that it has relationships with. We have taken a huge interest in identifying tenant by tenant, user by user based upon what we think the preferences are of the local market along side the tourist market. That is something that takes time, effort and principal involvement and our two companies have dedicated that to each other.”

Of course, the business potential of the site was already pretty evident. The stand-alone approximately 175,000-square-foot Fry’s Electronics adjacent to the property draws about 35,000 to 40,000 locals on a weekly basis. The huge daytime population in the area serves to boost the sales of the local stores. Stuart projects that the 250,000-square-foot office component at Town Square Las Vegas will bring 1000 employees to the property daily. Then there’s the business from the property’s hotel guests.

“We know the shopping/entertainment/dining budget far exceeds the gambling budget in the tourist population,” says Volk. 

The lifestyle lineup of tenants will range from ready-to-wear to a small of group of luxury offerings. The staple shopping tenants — Gap, J. Crew and Coldwater Creek — will be featured at Town Square Las Vegas, but they will be balanced out by a nice mix of tenants including Apple, babystyle and Kenneth Cole. Volk says that they went out of their way to avoid chain restaurant deals. “The closest we’ll come to that is Claim Jumper,” he says. “All of our other restaurants will be fantastic fit-and-finish places with great food. Call it a step above casual dining, but for the most part not white-table-cloth fine dining.”

Says Barkett, “I’ve never worked on a project that had so much demand to it. At ICSC in spring 2004, I walked away at 2 o’clock in the afternoon of the first day and said, ‘Jim, we’ve got a winner on our hands.’ People were hearing about it at the convention center and clamoring to get appointments with us to take a look at it.”

“We feel that we are going to be a viable alternative for The Forum Shoppes, the Grand Canal Shoppes or the Fashion Show Mall,” says Volk. “Those are fantastic environments, but the one thing they don’t have that we have is a streetscape environment and a chance to get away from the intense, sensory-overload environments of the Strip. It’s like dog years — three and a half days in Las Vegas is like 21 days because you’re up all night, you’re gambling, etc.”

Stuart points out another advantage that Town Square Las Vegas will have — unlike The Grand Canal Shoppes and The Forum Shoppes, the property will not have gaming, making it neutral to all of the casino hosts or concierge services throughout the city. “Without fail, the senior executives of the hotel franchises all say that it would be a first priority to send their customers here versus their competitor’s mall.”

Design Development Group, creators of Easton Town Center in Columbus, Ohio, was hired to design the town center setup. For the design of the all-important common areas, CENTRA brought in LifeScapes International’s Don Brinkerhoff, who worked on The Grove’s common areas in Los Angeles as well as those at the Bellagio, Mirage and Wynn Las Vegas. Marnell Corrao Associates is the general contractor.

All of these project partners were selected for their quality work and ability to deliver on schedule. No chance was taken. “We have spent exhaustive efforts [to get it right],” says Stuart. “It’s not like you’re building a mall in suburban San Antonio. This is going to be on the radar screen of every retailer and every developer in the country and will be talked about by tourists around the world. It’ll come down to the little things, it’ll be the extra details. They will all be done with quality and enduring value in mind.”

A Break From the Norm

Because of Las Vegas’ strong residential growth, most retail development geared toward the locals has been power centers and neighborhood grocery-anchored centers. Anything outside of those kinds of offerings hasn’t been developed because it’s been present on the Strip.

Town Square Las Vegas will turn that retail development formula on its head. The open-air, streetscape format will incorporate a collage of Main Street architectural designs from the last 100 years — Old-World-styled Spanish Mission, Mediterranean, traditional Main Street and contemporary town center. “What we really paid attention to is the authentication of the environments,” says Volk. “We wanted something that was authentic and could be that true gathering place that becomes part of the community.”

In the center of the town square, there will be a huge expanse of green space that will include a children’s park with a carousel and, believe it or not, a $2 million tree. “That children’s play area will be the quality of a Disney [site] and will attract parents and families alike just for that feature alone,” says Stuart. Visitors can explore the shops, stroll along the tree-lined promenades, take in a movie at the 18-screen RAVE Cinemas multiplex, choose from a variety of dining options or simply relax with their children in a unique open setting.

All the details and all the dollar signs going into the creation of Town Square Las Vegas are indicative of great effort to ensure business success. But there are also the long-term goals of creating a place that people can connect to and enjoy themselves in. This helps to create community identity while filling a void in the city’s composition.

“We’re not running quarter by quarter and trying to extract every earnings dollar we can out of these assets,” says Stuart. “We’re very hands-on. This is an emotional project to us; we’re vested into it at a personal level and we want to create a very special environment that not only fits into the fabric of the community, but that the community embraces as their own. That is something that is sorely missing in Las Vegas. Despite all the great things that get built on Las Vegas Boulevard, nothing is built that the local resident feels any sense of entitlement or ownership to. Any great city has a great shopping environment or a great district that becomes the gathering place for that community. There is nothing in Las Vegas [of that sort].”

©2005 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.